M/s. Regma Ceramics Limited, Yanam V. The Asst CIT, Kakinada

ITA 128/VIZ/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9923 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C DAS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 128 /VIZ/ 201 7 ( / ASSESSMENT YEAR: 20 12 - 20 1 3 ) M/S REGMA CERAMICS LTD. YANAM [PAN :AABCR8268F] VS. ACIT, CIRCLE - 1 KAKINADA ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI, AR / RESPONDENT BY : SHRI K.C.DAS, DR / DATE OF HEARING : 2 0 . 09. 2018 / DATE OF PRONOUNCEMENT : 26 .0 9 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEALS IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) [CIT(A)] - 2, VISAKHAPATNAM VIDE I.T.A.NO.55/2015 - 16/CIT(A) - 2/VSP/C - 1/KKD/2016 - 17 DATED 01.12.2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2 I.T.A. NO . 1 2 8 /VIZ/201 7 M/S REGMA CERAMICS LTD. YANAM 2. GROUND NOS. 1 AND 5 ARE GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 3. GROUND NO.2 IS NOT PRESSED BY THE LD. AR DURING THE APPEAL HEARING, HENCE THIS GROUND IS DISMISSED AS NOT PRESSED. 4. GROUND NO.3 AND 4 ARE RELATED TO THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT, MADE BY THE ASSESSING OFFICER (AO) FOR NOT DEDUCTING THE TDS ON INTEREST PAYMENT TO M/S PONDICHERRY INDUSTRIAL PROMOTI ON DEVELOPMENT AND INVESTMENT CORPORATION (PIPDIC) OF RS.41,35,478/ - AS REQUIRED U/S 194A OF THE INCOME TAX ACT (HEREINAFTER CALLED AS ACT). 5. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS MADE THE PAYMENT OF RS.41,35,476/ - TO M/S PIPDIC, BUT NOT DEDUCTED THE TDS AS REQUIRED U/S 194A OF THE ACT. THEREFORE, THE AO MADE THE DISALLOWANCE OF RS.41,35,478/ - AS PER SECTION 40(A)(IA) OF THE ACT. 6. ON APPEAL TO THE CIT(A), THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 3 I.T.A. NO . 1 2 8 /VIZ/201 7 M/S REGMA CERAMICS LTD. YANAM 7. AGG RIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE HAD PAID THE INTEREST TO THE TUNE OF RS.41,35,478/ - TO M/S PIPDIC WITHOUT DED UCTION OF TAX AT SOURCE. THE SAID ENTITY, PIPDIC IS NOT A STATUTORY CORPORATION U/S 194A(III)(B) AND NOT A NOTIFIED INSTITUTION U/S 194A(III)(F) OF THE ACT. THEREFORE, THE PAYMENT OF INTEREST TO PIPDIC REQUIRED TO BE DEDUCTED U/S 194A OF THE ACT. SINCE THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE AND REMITTED TO GOVERNMENT ACCOUNT, THE PAYMENT OF INTEREST ATTRACTS DISALLOWANCE U/S 40(A)(IA) OF THE ACT. THOUGH THE LD.AR RELIED ON THE DECISION OF SPECIAL BENCH IN THE CASE OF MER R ILYN SHIPPING & TRANSP ORT, 146 TTJ 1 OF ITAT, VISAKHAPATNAM, NOW THE ISSUE IS SETTLED BY HONBLE SUPREME COURT IN THE CASE OF PALAM GAS SERVICE [2017] 81 TAXMANN.COM 43 (SC) AND THE HONBLE APEX COURT HELD THAT WORD 'PAYABLE' OCCURRING IN SECTION 40(A)(IA) NOT ONLY COVERS CASES WHERE AMOUNT IS YET TO BE PAID BUT ALSO THOSE CASES WHERE AMOUNT HAS ACTUALLY BEEN PAID. THEREFORE, WE HOLD THAT THE LD.CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION AND WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). 4 I.T.A. NO . 1 2 8 /VIZ/201 7 M/S REGMA CERAMICS LTD. YANAM 9. IN THE RESUL T, THE APPEAL OF THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2018. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 26 . 0 9 .2018 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - REGMA CERA MICS LTD. METTAKUR, YANAM, PONDICHERRY (UT ) - 533464 2. / THE REVENUE THE ACIT , CIRCLE - 1 , KAKINADA 3. THE COMMISSIONER OF INCOME TAX - 2 , VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME - TAX (APPEALS) - 2 , VI SAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM